8). An MNCs exposure to multiple currencies is influenced by a. the variability of each currency and the systematic risk of the MNC company. b. the variability of each currency and the interdependence of the financial markets of the associated countries. c. the variability of each currency and the correlation of movements between the currencies. d. the systematic risk of the MNC company and the political risk of the associated countries. 9). Changes in the value of a MNC result from: a) Changes in foreign market conditions, b) Changes in international political environment and international political risk, c) Changes in the exchange rate, d) All of the above 10). Suppose the following scenario surrounding a European MNCs cash flow: economic conditions in a foreign country weaken, and the currency in the foreign country where a subsidiary of the MNC operates weaken against the euro. Then, what would you expect about the cash flow (CF) of the MNC? I). an increase of CF due to the weak economic conditions in a foreign country. Citizens of this country will increase the demand for the products of the MNC, and hence the CF of the MNC is expected to increase accordingly. II). an increase of CF because as host countrys currency is weaken the MNC will receive more euros because the foreign currency is depreciated. III). If economic conditions in a foreign country weaken, purchase of products decline and MNC sales in that country may be lower than expected. IV). If foreign currencies related to the MNC subsidiary weaken against the euro, the MNC will receive a lower amount of dollar cash flows than was expected. V). As the economic conditions are worsen in the foreign country, political risk is increased, and thus, the foreign government may increase taxes or impose barriers on the MNCs subsidiary. As a result, the CF are expected to decrease. a) only I and II are correct, b) only III and V are correct, c) only III and IV are correct, d) only V is correct e) only I and IV are correct.